All systems in the cloud

Cloud computing is hot!

A lot of companies are now investigating how to place software in the cloud i.e. outsource it.

Before I tell you what I think of this let me just describe the reason for having software in the first place.

The reason for having software

There are three reasons for having software:

  • To automate a business process
  • To collect data during a business process
  • To provide information as decision support during a business process

In todays business climate you have to be unique - i.e. have at least one unique product or business process. And you need to maintain that uniqueness either by keeping ahead of competition in your unique field or by making it difficult or unattractive to imitate your product or process.

Things to put in the cloud

If you are trying to keep ahead of competition you need to have a highly flexible and agile application portfolio and if this is the case you should put standardised activities in the cloud e.g. shipment of goods or e-payments to take full advantage of partners specialising in these activities.

Business processes that do not add to your competitive advantage could be outsourced or the software placed in the cloud e.g. general ledger will hardly bring you any advantage it is just something that need to be in place and function correctly.

Things you should never place in the cloud

Business processes or activities that give you edge over your competitors should never be placed in the cloud

  1. They could be reused by other companies removing your uniqueness
  2. You will have less influence on the rate and direction of change making it dificult to stay ahead

Governing principle

Buy for competitive parity - Build for competitive advantage.

In this case 'buy' meaning "buy software as a service from the cloud" and 'build' meaning "build and maintain the software inhouse (could be build/operated by external partners as bespoke software)".

Talk back

Please comment on my thoughts - Get in touch if you want to know more.